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Summary:

EQO, a mobile VoIP startup based in Vancouver might have cut as much as 65% of its work force, a sign that Mobile VoIP isn’t an easy nut to crack.

[qi:011] EQO Communications, a communications company based in Richmond, British Columbia (just outside of Vancouver), that made waves at Demo 2006 and raised a total of $13 million in two rounds of funding from GrowthWorks, BDC Capital and Ventures West, is rumored to have cut nearly 65 percent of its work force — reducing the number of employees from 35 to 12. The news was reported by Techvibes, a Canadian startup-related publication. I have called their marketing manager for a comment but had not heard back as of press time.

When it launched, we were intrigued by EQO because it was one of the first clients out there that allowed you to make Skype calls from a regular phone. Making Skype mobile was an opportunity that slipped away from EQO mostly because competitor iSkoot was better funded and had a better execution strategy. In August 2006, EQO got into a bit of a tiff with Skype. The company then refocused on social networks, but it seems even that strategy didn’t go anywhere. EQO raised another $9 million in August 2007.

Funny thing about these rumored job cuts is that the company has been supporting more and more mobile phones and was supporting all high-growth devices. The job cuts, if true, don’t bode well for the long-term health of the company. VoIP as an industry has proved to be hard nut to crack for startups, especially those aiming for the consumer market. Jangl and TalkPlus were two startups that hit the deck earlier this year. We are going to see more of these “save money on LD” phone apps with no discernible business model and relatively little traction or loyalty to follow suit. 

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  1. [...] Random Feed wrote an interesting post today onHere’s a quick excerptEQO Communications, a communications company based in Vancouver that made waves at Demo 2006 and raised a total of $13 million in two rounds of funding from GrowthWorks, BDC Capital and Ventures West is rumored to have cut nearly 65% of its work force — reducing the number of employees from 35 to 12. The news was reported by Techvibes, a Canadian startup related publication. I have called their marketing manager for a comment but had not heard back at press time. When it launched, we were int [...]

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  2. [...] VoIP Startup EQO Slashes Workforce by 65%* [GigaOm] [...]

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  3. [...] the End Near For EQO? There are a handful of people that are reporting about cut-backs at [...]

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  4. Hey Om – we’re not alone. Times are tough, as you pointed out http://gigaom.com/2008/10/08/sequoia-rings-the-alarm-bell-silicon-valley-in-trouble/. Our growth has actually been very strong – 2 million users, doubling every 8 weeks and growing revenue. Cutting back wasn’t ideal, but doing so lets us operate at near profitability and support our customers and partners until the smoke clears. Given the current financial environment, we felt it was the prudent thing to do.

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  5. [...] has it that VoIP company EQO has cut its workforce by an estimated 65 percent. According to Gigaom, it was only of the first companies to allow you to use Skype from a regular [...]

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  6. @Bill

    I feel you. I hope you make it on the other side and good luck with everything.

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  7. Hi Bill:
    Though I feel sorry for the employees who lost their jobs, it’s a very smart move. Many companies fail to understand the urgency and fail at the end. As OM said, wish u guys come out stronger and successfull from this economy crisis.

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  8. @Bill — I call bullsh&t. You’ve made a spurious claim you have 2 million users and you’re doubling the userbase every 8 weeks? So in two months let’s see you check in with GigaOm and confirm you’ve got 4 million users, right? fat chance.

    Your site traffic statistics according to compete.com of <5K per month doesn’t even come close to supporting that claim:

    http://siteanalytics.compete.com/talkplus.com+jangl.com+eqo.com/?metric=uv

    … in fact, the chart reveals a sharp decline in interest across your entire sector, and eqo appears to be the worst of the bunch. Probably we need to help you work on your definition of “near profitability”.

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  9. 2 million users? Yeah right. Check getjar.com the largest mobile download site world wide. The number shows they have had a total of 800K downloads. If you support the different phones models really well you might get a 40% conversion on these numbers. This works out to a maximum of 320K users who have a working version of EQO on their phone (if you think about users upgrading to newer versions through getjar this number is actually lower!!) With 11k new downloads last week it would take 72 weeks to double the user base!

    As for their other 1.7 Million users. Where did they get them from? Their website stats don’t account for it if you ask me. I don’t know about the viral dynamics of the EQO mobile application, but I would be amazed if that is driving all these other new users.

    As for revenues, i really hope for them they have revenues from their user base!

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  10. [...] has it that VoIP company EQO has cut its workforce by an estimated 65 percent. According to Gigaom, it was only of the first companies to allow you to use Skype from a regular [...]

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