Blog Post

Goodbye, Tello

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.


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?

20 Responses to “Goodbye, Tello”

  1. Tello was an interesting concept before it was hit by the bright shiney object of the month club. It started, as most startups do, with a few folks in a bar, only one of them listed as ‘founders’. These folks poured heart and sweat into figuring out products and technologies.

    Along come a few ‘luminaries’ short on real startup experience and an untried, 1st time CEO who brought in his own team resulting in a predictable, as you say “had a mutiny of sorts.” By months before it was done, not a one of the original ‘founders’ were left, having been run off directly or, “up and quit”.

    It was a fun ride while it lasted. Rumors of a shareholder lawsuit are rattling around as well.

  2. Well there are more companies to join the club. is down for a while. hopfully it will get back on track. my wishes to pat phelan. However he is doing good on the uk version.

  3. Yep, Aswath … slip on my part. Sorry about that! Meant to say Vonage. Not exactly the low rent distrect around those parts, eh? Had no clue it was Pru.

    But it might be Verizon, soon enough … ;)

  4. Hi,
    I hate to be a downer, but will anyone ever create anything with a cell phone?

    I actually have gotten to the point where I refuse to write about them.

    If I could call Andromeda and talk to Elvis, then I might be impressed with VOIP or mobile technology again.

    Barring that, the endless hours we spend (not only talking on the jabber widgets)but writing about them borders on human collective insanity.

    Just some thoughts, sorry to rain on everyone, just remember a time when we actually talked to each other, in person and up close.

    Phil Butler

  5. I wonder how desensitized we have become. What about the shattered dreams, the jobs lost…and what about the failures themselves? What do they mean for the very industries (whether Web 2.0 or VOIP) that we feed off?

    Am I missing something?

  6. 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?

  7. 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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  8. whoopee

    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.