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Summary:

MagicJack, the USB-based VoIP service from telco vet Dan Borislow, intrigued us from the moment we first read about it in a column by Herb Greenberg. In search of more details, we were finally able to track down Borislow Monday for a brief demo and some […]

MagicJack, the USB-based VoIP service from telco vet Dan Borislow, intrigued us from the moment we first read about it in a column by Herb Greenberg. In search of more details, we were finally able to track down Borislow Monday for a brief demo and some inside info, in advance of the product’s “formal” intro either later this month or early next.

Some quick tidbits: The company’s business plan revolves not so much around the USB gizmo but instead around a robust nationwide network that Borislow says is also a certified CLEC; the company has interconnect agreements with all the larger carriers, meaning it’s not about to be shut down like some other value-cost calling operations; and as part of its initial marketing push, MagicJack plans to give away a free phone number (of which it says it has millions) to the first wave of customers who plop down $29.95 or $39.95, a price that includes a full year of unlimited calling to the U.S., Canada and parts of Europe.

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If we mess up on any details here, we will blame the noisy atmosphere, since our “interview” took place amidst wayward forklifts and booth-building crews during the exhibit-floor setup day at Spring 2007 VON in San Jose. While it’s possible that we are the willing victims in a measured slow-leak marketing campaign, any operation that claims to have spent two years building a nationwide network of Internet gateways (with 31 session border controllers, a number Borislow is quite proud of), and has spent the exhaustive and expensive time certifying itself as a competitive local exchange carrier isn’t some Web 2.0 play.

The consumer side of MagicJack goes like this: Users will plug the USB end of the ‘jack’ into their Internet-connected computer, and will plug a phone into the other end of the device. The device then boots a softphone onto the screen (in 28 seconds, in our impromptu test); you then can pick up the phone and start dialing. The MagicJack will cost $39.99 for a jack with a memory chip (for the softphone), or $29.99 for one without memory (you can alternatively download the client and keep it on your PC). Yearly subscriptions thereafter will cost $19.99, Borislow has said.

The business side of MagicJack, as best as we can tell, comes from the subscription plans as well as interconnect fees paid to MagicJack’s CLEC partner company (apparently called YMax Communications Corp.) whenever a MagicJack phone number is called. More details — such as additional features embedded into the product, like voicemail, conference calling, and a direct-to-Google search link — will be revealed at the “official” announcement, whenver that is. (At the current leak rate, Borislow might not have much left to tell, other than “some big marketing plan” that he kept to himself Monday.)

Borislow, who claims to have provided most of MagicJack’s $17 million in funding from his own pockets, thinks there is a huge market for value-priced VoIP-based telephony, even though others like Vonage and Skype are revenue-challenged right now. “There’s a lot of people with fixed costs of $700 a year for phone service who may now be able to buy a case of beer a week instead,” Borislow said, putting a thirsty twist on MagicJack’s purported savings. College students or teens who already have laptops and Internet connectivity are also target customers, he said.

On the networking side, Borislow is quick to diagram the MagicJack/YMax advantage, which he says comes from building a network that covers “80 percent of the U.S. population” with its gateways and SBCs. By connecting most of a call’s distance over the Internet between its own gear, Borislow says MagicJack will have far superior call quality to other VoIP providers (or even PSTN calls routed over IP) , who must traverse multiple equipment types and transports that can introduce latency and degrade calls.

(Look for MagicJack in the SJ Labs booth at VON, since MagicJack acquired the softphone-technology firm as part of its inception.)

  1. [...] post by Paul Kapustka and software by Elliott [...]

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  2. I’d have to question the business plan a little bit. The telecom graveyard is filled with the bones of CLECs that built a business plan around interconnection fees. That kind of business plan requires a serious imbalance in calling patterns – significantly more inbound than outbound – but if the selling hook for MagicJack is “unlimited calling for $20/year”, there’s likely to be more outbound than inbound calling.

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  3. MagicJack should connect directly to the internet…

    It’s interesting how many positive comments the MagicJack got days after the argument in the comment section of Paul’s former article about it. Seems that the MagicJack’s fans found their way to GigaOM. Are they really that enthusiastic?…

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  4. VoIP USB Device MagicJack Being Showcased at Spring VON…

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  5. I tried out the magicjack and it worked fine until I logged into my laptop the next morning all my settings were wiped out and my keyboard is not working properly.
    Bummed out.

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    1. the magic jack just stoped working i took it back where i got it now it wont even down load at all this is not fair
      \

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      1. THe magic Jack is setup to expire once you hit 700min.

        Mine hit 700mins and it is garbage now

        DO not waste your money
        THIS IS A BIG SCAM
        WALMART Returned it and I am never gonna look back.
        if you have to try one of these money wasters buy it from walmart
        atleast you can return it without problems

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      2. WHY IS MJ NOT YET INVESTIGATED FOR TAKING ADVANTAGE OF CONSUMERS?

        Everyone knows, there are posts all over the internet, that MJ stops working after a certain number of minutes AND If you have regular audio playing software that most normal people use. MJ just does not tell you that until after you can no longer return the device.

        REPORT MJ

        BETTER BUSINESS BUREAU
        CONSUMER AFFAIRS
        ANY RELATED SUCH AGENCIES

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      3. Life is not fair! Get over it. Magicjerk works just fine as a fishing lure.

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      4. I have Magic Jack as My home phone and I love it! I have used it on my desktop and my laptop. I have never had anything disappear or mess up on either computer. I have had it ever since it over two years. The other day it wouldn’t connect. It said BAD HARDWARE or something. I got online and talked to tech support thru their onscreen chat. She had me go to my computer and locate the Magic Jack. It shows up as a removable drive. Then she had me format it, then download the update file and run it. BAM! Back in business. Works wonderful as always. I will give some as Christmas Gifts this year. It is hard times right now and you can’t beat this for $19.95 a year!

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    2. milton yammux Thursday, June 18, 2009

      how did you fix the problem…. i can read your comment fine

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      1. Enough said, true in some parts but come on peope you only payd what $ 20 a year.You have to understand it is not your old old fashion land line you have to be savvy to troubleshoot one of these take it from a telephone tech who gave up his tel service to go for MJ We have had it for a year now guess what we love it.go to europe and make a tel conversation for less than a buck good luck. Few things you all should know about VoIP is that first of all relays on good reliable and I mean relaiable Inet service( dont expect MJ to work on dial Up) and second MJ needs a lot of PC resourses

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      2. Josephine Clark Thursday, March 4, 2010

        when i call on my magic jack the person on the other end can’t hear me I can hear them but they can’t hear me i paid $70.00 for five years and $39.00 for the magic jack. Josephine Clark

        josephineclark@hughes.net

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    3. johnstecker Sunday, July 26, 2009

      Same thing I incountered only it was my sound card in my desktop and Laptop. What did you do?
      Reguards…

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    4. Junk your laptop it means the magicjack and your computer doesn’t have the enough capability to support the device..

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  6. Sharl Guillory Tuesday, May 8, 2007

    I’m interested in MagicJack for my phone service but would like more comments from those who already have experience with it – give me the pluses and minuses, if any.

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    1. I just had a tough time with MagicJack. I had the service from September 2008 until now March 2009. I had a myriad of problems from day one. At first I could never just answer the phone on one ring. The phone would ring for 30 seconds and it would let me answer it., then I couldn’t get signals, and then the last thing that happened is that I lost all my files from out of nowhere, I called customer service and requested a new one be sent to me, but the wanted to bill me another $39.95 and send me a new one. Then give me my money back. I just told them that they can cancel me out. i will go back to using my cell as my only phone at least i know what I am getting for my money.

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      1. I have been wanting to buy a MagicJack since last year but decided against it after reading all the negative reviews all over the internet. Then last week I received a call from my brother in Jamaica and he was calling me from his MagicJack. The connection was so good I though he was calling from somewhere in the USA until he told me he was on a MagicJack. When I asked him about the issues that I have been reading about, he told me he have had no problems since the day he took the product out of the packaging and plug it into is computer.

        Now happy that I finally spoke with someone I can trust (my brother would never lie to me), I decided to buy my MagicJack. On my brother’s recommendation, I bought mine from Best Buy instead of MJ’s website. That way, if I the product doesn’t work to my satisfaction I can just take it back to Best Buy for a refund instead of trying to go through MJ’s Customer Service.

        I got home with my new MJ at 10:35am, 03/28/09, plugged it into my notebook allow the software to install itself, registered for my personal number and 911 access and I am happy to report that I was not required to do annything else, no configeration, the product has been working like a charm ever since then. The clarity is awsome, I have been calling Canada and all over the USA and except for the fact that everyone noticed that my number have change, no one noticed that I am not calling from my land phone. I even connected my HP fax machine to the MJ and sent faxes with no problem.

        Looking back at most of the folks who are reporting problems with their MJ, I am wondering an upgrade was done to the software and all that is needed if for folks with the older version need to run the upgrade for the MJ software. (just a thought)

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      2. I bought a magic Jack just to “try the hype” over this. I have now cancelled AT&T and my Vonage line as this thing is AWESOME! I can’t believe how easy and perfect it works! Why in the heck would ATT not buy this thing and kill it or use it as a new model and revenue generating product? I have over 1000 minutes on it and it has never “quit”. I am buying 2 more and sending Christmas presents with it to all my nieces, nephews and family!

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    2. I bought MJ one year ago. I was going to be away for a few months and thought my cell phone minutes would suffer. It worked great, no noice of interference. I am once again out of town and used MJ yesterday. It worked fine. Today, not so good. I am unable use the MJ, keep getting messages that have different “windows”, not so same as yesterday. I have been on the computer one and a half hours now still unable to make corrections and get it to work once again.

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      1. The MagicJack doesn’t seem to offer any real support. When my MagicJack froze my computer on startup I disconnected the device and went to their support chat. It turns out MagicJack knew all along their device conflicts with music players like musicmatch, musicmatch Jukebox or Yahoo Jukebox and burn software like NERO/Roxio.

        MagicJack’s solution – REMOVE ALL MUSIC PLAYERS AND ANY BURN SOFTWARE. When I pressed for burn software that would work with MagicJack I was told the only way to keep burn software on my computer and keep the MagicJack working was to purchase a seperate computer to use as a detacated server just for MagicJack. I don’t know about most people but I purchased MagicJack to save money NOT to throw it away trying to get it to work. MagicJack wouldn’t even admit they were going to try to fix the conflict. Instead they kept telling me to remove all burning programs.

        I think people need to start filing as many complaints as possible. With the FCC, the BBB and anyone else you can think of. So long as people accept this BS MagicJack will continue to treat us, their customers, like garbage. We need to scream at MagicJack on their Chat Help, through the newspapers and the evening news. MagicJack needs to know people aren’t going to tear their computers to pieces just to help MagicJack avoid fixing known bugs.

        Now everytime MagicJack does an update I need to format the Jack, reboot the computer and wait at least an hour before using my MagicJack again to give the system time to reset. (MagicJack’s instructions. Not mine.) When I format I lose all recorded contacts and the use of the MagicJack till it resets.

        If MagicJack had a full disclosure on their ads telling people about the conflicts with burn software and music players I would never have purchased this nightlight. At presant time, Ive spent 20 times as long on the Chat Help trying to get the MagicJack working right then actually making calls with it.

        Unless you are planning on just installing Windows, an AV and connecting the computer to the internet to use the MagicJack, I’d advise everyone to save their money. If you actually want to use your computer for business purposes or for personal pleasure, MagicJack wil conflict with something on your computer sooner or later.

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    3. I purchased the magic jack the cons are i didnt have good sound quality, it cut out real bad. I have another computer that has nothiing on it other then windows and tried it on it and it sounded great and works great. Meaning i wouldnt use it on the computer you use to run the magic jack as your only form of phone service. my second computer i dont have a keyboard or monitor nor mouse hooked up to it just the magic jack and the ethernet thats it. Also the computer has to stay running, if the computer shuts down so does the phone. All in all I like the magic jack and I am reading info on it now where people uses it has a way to use their fax machines, that is my next project. I hope this helps you some and let me know if I can answer anymore of your questions

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    4. Diane Weissenberger Friday, April 10, 2009

      I have had my Magic Jack for a month now and absolutely love it! I have not had any problems with installation or day to day use and can hardly wait to fire my phone company. The only disappointment is that you cannot use your fax machine with the Magic Jack software, but I don’t fax often, so this won’t be a major issue for me. Given the reasonable price and the money you’ll save within in a year, try it out!

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      1. I can tell you I did use my fax machine with my MJ and it worked like a charm. I both receive and send faxes without a problem. The only issue is a phone plugged to the phone line through the fax machine will not work on MJ. To solve this, I simply put a splitter on the MJ unit itself…one going to the phone and one going to the fax machine.

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      2. I tried to use the Magic Jack for a phone and a fax with a splitter and it did not work at all. I had to keep my landline for the fax, I have the phone hooked up with MagicJack but call clarity is so bad most calls I make are intolerable, incoming calls are better. It is best for just taking messages, and does so with the computer off.

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    5. Listen, if you do lots of downloadings, don’t even think about running magicJ on that same connection, it will work, but people won’t be able to hear you when you speak. If your computer is very slow, magicJ will act suck! beside that it works fine for me…

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      1. I don’t have Magicjack and I’ve been think about getting but was just woundering if I get to pick any phone number you want, because i want use the same area code and same prefix as my friend that lives in a total different area code as me. please some one let me know

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    6. I installed the Magic Jack a couple of months ago. I do not use it very often but it beeps while I am talking. I cannot hear it but the person I am talking to can. I am not sure what to do. I reinstalled it and I changed telephones to make sure it was not the phone. Other than that it works fine but this beep is annoying to the person I am talking to. Any ideas????

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      1. i have the same problem we just installed magic jack and everyone else hears beaps but me, please let me know if you find anything out thanks

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      2. looking for the same answer as the question above, which we have had the same experience in all our calls, for a long long time now. i even had a live chat with a tech support. and followed there recommendation. and still have the same problem. help!!!!

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      3. I have tech-chatted MANY times about the beeping heard by the people on the other end, and the techs are ignorant of the problem. they have me reinstall, upgrade, reboot, nothing!

        LOOK ot the phone pad on your PC screen and you will see it dialing numbers and pound signs everytime it beeps!

        Am I the only one seeing this? It scares me.

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      4. Has anyone come up with a solution to get rid of the annoying beeping?

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      5. i read all the comments about the magic jack making the beeping during a conversation did you fiqure out how to fix it or did you trash the magic jack all together?

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      6. Email dan@magicjack.com and ask for the patch to stop the beeping. They will (should) send you an email with a link to download.

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      7. About the BEEPING: I emailed complaints to Dan@magicjack.com and got this reply. It has worked for me so far.

        My name is Marvin and was asked by Dan to address and help out with your concern.
        Some people are experiencing this beeping issue. Please download and run this Patch with your magicJack plugged it. It should eliminate most of the beeping sounds:

        http://upgrades.talk4free.com/upgrade/20090619000002/upgrade.exe

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      8. MINE BEEPED ALL THE TIME AND I WENT TO THE INVENTOR OF MAGIC JACK HE FIXED IT FOR ME AND IT WORKS GREEEATTT HIS E-MAIL ADDRESS IS dan@magicjack.com SEE IF HE CAN HELP YOU. LINDA

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      9. HOLY CRAP Hey LINDA DIAL….

        we get it.. you posted the same crap here repeatedly…

        you emailed Dan. We understand, we got it. No need to post it 20 times.. jeeshhhhh…

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    7. we bought 2 magic jacks ,we have a lot of trouble with them.a lot of jumble in words,otherwise like you can hear a word here and there,and when it desides to cut you off the line will go dead.as of now i am not a happy camper.i cant find anyone to give me an answer on how to fix it,or if it can be fixed.oh yea you can’t tell who is calling either unless you go look at the computer and you have their name programed in computer.

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      1. We have had our majic jack for over a year. We also have a cell phone. We purchased ours for calls to Canada, and we use it often. We have used it over 700 hours, and it still works. We full time RV and it works great most of the time. It all depends on where you are at the time you use the MJ. The company can’t be responsible for the area you live in, but if you are in a major area, most of the time your connections will be good, or ours is at least. I think everyone needs to realize it is only 19.99, for a year. Where else can you find that? I look at it this way, if I get one years use out of it, it has paid for itself.

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      2. What speed is your internet?

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    8. do not make it ur main line….its sucks really bad…i tried out 2 of them and i have returned both. i have the fastest internet there is and it slows it down at times and when i really want to make an important call it seems to act up. i went back to my digital phone with my cable company. the best thing for u to do is try it out for urself. everybody is leaving different feedbacks but most are negative. dont want to make u think its 100% garbage. but from my experience it is.

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    9. The magic jack worked very good. I can’t tell U how much money I saved. I my mj for 8 month.
      I also used it overseas for 6 month. It worked for very good, once in a while if the internet was slow ur voice would brake up, all u have to do was hang up and start over. it paid for it self 1000 times because I call the states every day for hours.

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    10. Magicjack to magicjack calls are for free and magicjack to anywhere in the US and Canada are for free. Even if it’s not magicjack number. When you connect it into the USB port of your computer it occupies two drivers which is the E: F: drive sometimes it conflicts with the other flash drives so it will not install properly, but most probably it depends how fast your computer is the magicjack will still work. Make sure your computer operating is working well with the capable parts because if not your computer will slow down. There are some customers complaining but once they have tried to use the magicjack to a different computer, it will work.

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      1. TO DEFENDER, Heres how it works meat-stick. You buy a piece of hardware, it comes with instructions, these are written in the language of English. You install a piece of hardware in your PC, it comes with instructions, they’re written in the language of machine code (or eventually translated into it via programing language). Thats what a DRIVER is. Windows assigns different drive letters depending on whats already been issued and whats available. NOT E: and F: GET A CLUE.

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      2. A driver is instructions for your operating system (xp, win7, linux) on how to use a device. Drive and driver are not the same, a PC doesn’t come with drivers waiting to be occupied, or driven aaaahhhhh

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  7. I have 10 unopened magicjacks in my possession and I have one out of the package as well. I had to try the service and it was great. The connection is clear and it doesn’t cost anything at all for the first year and only 19.99 after that. I was trying to sell them but I have no idea of how to go about it. Any advice?

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    1. depending on the amount of money you are asking for per magic jack i may be interested in some

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    2. Ebay them.

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      1. magic jack is sold at my local Wal mart in the — “as seen on TV section ” they cost $39.99, and then 19.99 per year . I have not bought one yet, but am thinking about it. I am worried about it messing up my computer, maybe needlessly?

        Bill—

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  8. Frank, Were you able to make international calls?

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    1. CAN YOU TELL ME HOW TO GET THE INTERNATIONAL MINUTS?I TRY FOR FIVE DAYS EVERY TIME I TRY TO PURCASE TIME IT GIVE ME AN (ERROR CLP2!) I TRY WITH THE ASSISTANCE FROM MAGIC JACK THEY KEEP SAYING TRY IN 24 HOURS.THANK YOU FOR ANY INFO. THAT YOU CAN GIVE ME

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      1. did you fill out the required info of the credit card if you do not put the complete year like i did it will not work,you need to fill out corectly…regards

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    2. I am using the MJ from Japan to call the states. works good.

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  9. I’m trying to buy one, but I can’t seem to get any response from the company. If anyone has one they would like to sell (Frank maybe?) or can tell me how to get one, I’m interested. You can reach me at skyjet at esp.net. Thanks.

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  10. There are many more comments on the other gigaOM entry on magicjack, http://gigaom.com/2007/03/09/magicjack-simpler-voip-than-skype/ .

    there is also a forum now on their official site, http://forum.magicjack.com/

    I got one just today (wait, after midnight, so yesterday). I gotta say I’m very pleased on the whole. Some complaints and not totally smooth but what do you expect when you’re customer #58 in a brand new company?

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