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.

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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?

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