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Summary:

When I first read about Callvine, a company that makes an eponymously named group calling and texting application for iOS 4, I remembered what New York Yankees legend Yogi Berra once said: it’s like déjà vu all over again.

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When I first read about Callvine, a company that makes an eponymously named group calling and texting application for iOS 4, I remembered what New York Yankees legend Yogi Berra once said: it’s like déjà vu all over again.

Callvine is a decent looking app; I’ll give them that. It’s simple. It’s fairly easy to add contacts to this app, and it’s equally easy to send text messages and phone calls to a group. But that isn’t enough for this company to carve up a sizable business.

The company, founded by Rudy Prince, founder and chief executive of eFax, a popular web-based faxing service, has $4 million in funding from S3 Ventures and is trying to find success in a market that, despite making theoretical sense, is hard to monetize. At a DEMO event in 2006, a Canadian company called iotum launched a similar service.

iotum’s app did a lot of the same things Callvine does. It too had a seasoned and well-regarded expert as its chief executive. It also had a decent amount of funding, and launched at a time when there was a lot of interest in IP-based voice startups. Suffice to say, they eventually realized that group calling is nothing but a euphemism for conference calls. They changed the focus of their business to a service: Calliflower, a tool for simple-to-use conference calling.

What was the reason all the fancy stuff didn’t work? My theory: there aren’t that many users who are looking to make group calls to more than 10 (or even 20) people on an ongoing basis.

Group calls with more than 20 people are the domain of large conference-calling services catering to the ideal customers: large companies. Small business owners, consultants, analysts and other such most likely customers of Callvine aren’t going to be making that many calls. Ironically, Callvine’s screenshots show a lot of consumers using the service. I’m not so sure — the group calls my distributed family makes at best involve three or four people — easily facilitated by conference features on pretty much any smartphone.

Assuming that this service gets serious traction, it would need to sign up a lot of users and have them make lots of calls to generate a sizeable amount of sales, never mind profits. Of all the VoIP services, only Skype has evolved enough to get scale.

What about texting? The company offers group texting to 100 or more people which makes it less ideal for consumers, and perfect for marketers. I guess this is where skills learned when building up eFax come in handy. Even in this business, the company has many competitors. Gogii (the company behind TextPlus) and TextFree are two well-established competitors.

I wish Callvine good luck in their endeavor, but I have a sneaking suspicion they may have to rethink their business soon enough.

  1. Om –

    Thanks for taking a personal look at Callvine and totally understand the déjà vu reference as others have certainly been down this path – including Vello whose assets we purchased as the basis of Callvine. However, the iPhone truly did change everything about the mobile market (it wasn’t available when Vello and iotum launched), and we haven’t seen an app yet that does what we’re doing – making group calls and texts with a single touch. Just to be clear – we are going after the conference calling market and targeting mobile professionals – we’re just using the term “group calls” to be more consumer friendly. The iPhone is a critical business tool for many today and our market research showed 40% of iPhone users have participated on a conference call and 24% have hosted calls from their iPhones.

    As other iPhone developers have pointed out, the lines between consumer and business use have become increasingly blurry (Evernote says 80% of their users use it for consumer and business use), and we believe that by offering our free mobile conferencing service, we can find the road warriors, sales execs, and field personnel that can really benefit from an app to set up and manage a group call (aka “conference call”) on the go. I fully agree that our vision does need serious scale and we’re building out our platform and service to support the level of users it requires. Keep an eye out for upcoming partner announcements where we’ll be proving out our model even more.

    Best -

    Rudy Prince
    CEO, Callvine

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  2. Seems like a they will have to aim for a very niche market for this type of service.
    Having more then 3 to 4 people on a group call is at times hard to manage so having 10 or 20 will be difficult and this will be a big challenge so you are right they might have to re-think their model

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  3. Brian McConnell Wednesday, August 11, 2010

    My last company, Open Communication Systems, did this. We started out with a consumer focused group communication system, quickly figured out that was going to make exactly zero dollars, and transitioned to business conferencing and group messaging.

    This is an ok space to be in, but margins have eroded dramatically thanks to bottom feeders, and free VoIP services like Skype. ZipDX (www.zipdx.com) has the right idea by offering high quality audio conferencing, something that is worth paying extra for. Otherwise it is hard to differentiate yourself against entrenched providers.

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