From the monthly archives: December 2008

New_Years_Toast I was going to do an industry retrospective on 2008 along with predictions for 2009, but then I looked around at some other bloggers and saw that some really great pieces had already been written. So rather than do my own, let me point you to some great posts:

Jon Arnold wrote VoIP in 2008 – “I’m Not Dead”

Traditional landline VoIP was a good place to start, but in 2009, VoIP will be more about voice services than telephony…  more about voice-based or voice-enabled applications that make the voice experience more interesting. In some cases it will be about making calls less expensive, but for the most part it will be about doing new things or old things in new ways.

He goes on to list 10 innovative start-ups and I’m pleased to say that Fonolo was included (actually top of the list, but I’m not going to read anything into that.)

Andy Abramson posted some commentary on Jon’s post here.

Garrett Smith has been putting up an excellent series of posts, asking a standard set of questions to interesting people in the industry. So far, he has posted answers from Nick Galea (3CX), Rafael Fonseca (Cedar Point Communications), Steve Wong (Clearsight Networks), David Schenkel (Objectworld), Dan Hoffman (M5), Peter Diedrich (Mobivox), Mike Oeth (Junction Networks), Irv Shapiro (IfByPhone), Ari Rabban (, Alec Saunders (Iotum) and Andy Abramson (Comunicano). I’ve just submitted my answers, so hopefully I’m not too late to be included. You can see the whole series here. [CORRECTION: You can read my interview here.]

Springwise posted “This year’s top 10 telecom & mobile ideas” and I was pleasantly surprised that Fonolo was included. (We’re listed as number 1, but once again I’m not going to read anything into that.)

Finally, Robert Poe wrote an excellent piece titled “The Top 25 VoIP Innovations of 2008“. I’ll take an excerpt from that post as the closing note for my closing post of the year:

The VoIP industry, like most others, felt the impact of the 2008 economic crisis. Promising startups laid off employees. Some even shut down. But VoIP companies had an advantage many others didn’t: their capacity for intense innovation. That ability let them provide products and services that could help struggling businesses of all sorts, and even individuals, save money and work in new and better ways… It’s no surprise, then, that the level of VoIP innovation remained as high this year as in 2007.

I expect no less from 2009! Happy new year everyone!

Disclaimer: Andy and Jon are advisors to Fonolo.


Last Tuesday I was at a local Toronto event called CEO Fusion, run by Bryan Watson, who is also director of the National Angel Capital Organization. He started the evening by saying to the crowd that traditional venture capital in Toronto is effectively gone. So the mood among entrepeneurs in the room was pretty gloomy. In fact, the main theme of the evening was “how to survive with less capital”.

Well, yesterday Mark (“StartupCFO”) MacLeod sounded a bright note by posting news about a couple recent VC deals in Canada.

1) Tech Capital Partners invested in PostRank (formerly AideRSS), a tool from bloggers to understand the traffic in and out of their blogs. They just released an update today that won praise from ReadWriteWeb: “We love … PostRank … but today [it's] really outdone itself with the release of a powerful and eye catching new widget to display your blog’s hottest posts”. [More] I haven’t tried PostRank yet (I’ve been neglecting the ole’ blog a bit) … maybe in the new year.

2) RHO Canada and Growthworks joined JLA as investors in Netshelter, putting together an $11m round. Netshelter is a “vertical media network”, which means they own a collection of niche websites/blogs that add up to a lot of well-segmented traffic. Their site claims they “recently passed CNET to become the #1 Tech property online according to comScore”. Scanning through their list of properties there are indeed a few names I recognize, but I have to say it’s surprising that a company I’ve never heard of has this kind of reach.

3) just raised $4.6 from Edgestone, Tech Capital Partners  and Celtic House. Wired calls them “VH1′s Pop-up video mashed together with the shopping network.”

That’s the good news. The bad news is that all of these are later stage or follow-on rounds. No new deals.

Following Mark’s post, I had a Twitter thread with him and old friend Jim “JPWP” Parsons:


I’ve heard several people say things ike “we need a restart on VC” or that the “VC model is broken”. But I haven’t really heard how it can be done differently.

For a different perspective, read this excellent post from Allan Leinwand, a Bay Area VC that I met last year: Counterpoint: It’s Time for Venture Capital – Now More Than Ever.

Bryan Watson just got back to me on this, adding some data to quantify the trend (emphasis mine):

There are, with a few notable exceptions like Growthworks, XPV, Avrio Ventures, TechCapital Partners, etc., virtually no VCs left in the early-stage space in Ontario. The Canadian Venture Capital Association released a report on November 18th citing that, from across Canada, Ontario experienced one of the most substantial declines in VC activity in Q3 2008. A total of $163 million was invested in 36 companies in the province, or 43% less than the $283 million of Q3 2007. I suspect most of this was later-stage follow-on investment into existing portfolio companies, not new investment in early-stage companies. Thank goodness for Angels!

Thank goodness indeed. Without them, start-ups like Fonolo and many others simply wouldn’t exist in Canada.


image Yesterday, we announced that Fonolo is now in open beta testing. This is a big milestone for the company. It was met with great applause from the press, and great enthusiasm from the general public.

Here’s the press release:
Fonolo Gives Consumers Relief from Phone-Menu Frustration for More Than 300 North American Companies

The significance

One of the key challenges for any web service (whether it’s Google or Facebook or CNN) is its ability to "scale". That is, does it work as well when a million people use it, as it does when ten people use it? Today, we are sufficiently confident in the infrastructure we’ve built to give up that control and open our doors to the public. By announcing free, unlimited calling, we’ve said "Yes, Fonolo can handle full scale calling".

But Fonolo actually has two scaling challenges. The first is handling large call volume, as described above. The second is being able to scale up our database of companies. The foundation of Fonolo is our "spidering" that maps out the phone menus. It goes without saying that Fonolo is not going useful to you if the company you want to call is not in our index. By announcing that over 300 companies are available on Fonolo, we’ve said "Yes, our database is big enough to be useful to the general public."

The response

"[Fonolo] lets you browse company phone trees and dial straight to that section, skipping having to sit through tedious voice menus or remember specific buttons to press. Better yet, it does it all without you having to actually dial the number on your phone."
Fonolo’s easy deep dial service opens up

Skype Journal:
"we all love to navigate our way through those pesky…  phone trees that go through menu after menu to connect you directly to an appropriate destination service or person. NOT!"
Fonolo Takes Its "Deep Dialing" Into Full Public Beta

Lifehacker Blog:
"Pick a company, browse their phone directory tree by title and automated dialog, choose where you want to jump in, and Fonolo calls you with a direct connection there… auto-dial jujitsu."
Fonolo Cuts Through Corporate Voicemail Trees


Oh, and one last thing: Please vote for Fonolo in the Crunchie awards. It’s dead simple. There’s no form to fill out. Just click here and then click "Nominate". Today’s the last day for votes, so please do it before midnight.


Ecomm badgeI just received a note from organizer Lee Dryburgh that registration is now open for the 2009 Emerging Communication Conference (“EComm”). Lee’s been generous enough to extend a special discount to loyal readers of my blog: Use promotional code “Fonolo” for 20% off!

EComm is fast becoming the primary forum for innovation in the telecom space. I think there are two factors that make this conference such a dynamic event.

First is the format: Everybody in one room, 15 minutes per speaker, strictly enforced. I’ve never liked the old “trade show” format, where there are multiple “tracks” filled with hour-long “panel discussions” and you find yourself wandering from room to room, looking for something interesting.  Lee’s format is much better suited to our modern day attention micro-span.

Second is that the speaker list is a well balanced mix. It’s got big name incumbents (Sprint, Nokia, BT, T-Mobile), established disruptors (Skype, Digium, Voxeo), disruptors-in-progress (PhoneTag, IfByPhone, Iotum) and big picture thinkers (Martin Geddes, Dean Bubley, Alan Quayle).

You may recall that at last year’s EComm, we unveiled Fonolo for the first time, and won “Best New Product”. (Video of that presentation is here.) Lee has given me a speaking slot once again and we’re going to use the opportunity for another juicy announcement, so I hope to see many of you there.


Telco 2.0 LogoMartin Geddes, Chief Analyst of STL Partners,  is one of the most respected analysts in telecom. STL’s annual “Telco 2.0 Executive Brainstorm” is a must-attend event for the world’s top telecom execs in the world. This year, I was honored to have Martin feature Fonolo in his keynote speech, which is summarized in this post: Voice telephony: death or glory?

An excerpt:

“[Martin's] thesis is a simple one: telcos have consistently abandoned their core product, and are ignoring new business models, whilst pursuing a fools’ gold in media content. The old model — charging users for software services that have no marginal cost or barriers to entry — is dying. To illustrate future business models he gave three examples of how money could be made in future…

The first of these was… Fonolo [which] exquisitely demonstrates that the value is in integration of telephony and the Web, as well as moving from the call itself to the set-up of the interaction.

… [but] who benefits more: the consumer, or the call centre? We think that it’s the latter, and the consumer is the price-sensitive side. The call centre wants the maximum rate of self-care, high customer satisfaction, and the web site offers the ability to do all kinds of enhanced multi-modal interactions that a 0-9*# keypad can’t do well… Therefore in our two-sided market world, we’d get telcos to distribute and promote this tool (on their fixed, mobile and on-device portals). They would then sell these enhanced capabilities to call centres.”

As part of the presentation, Martin showed a short video I made for him that discusses how Fonolo can work with carriers: