When tiny Toktumi found its new softphone suddenly toe-to-toe with Google Voice, it didn't cave in; it figured out how to grow
It's a nightmare that startups and big businesses alike fear—Google suddenly getting into their market and sucking users and profits. It's a legitimate concern, but it doesn't have to be the end for companies that find themselves in Google's sights. For San Francisco's Toktumi, its trial-by-Google began earlier this summer about a year and half after the startup made its debut with the wrong product—which it then revamped, only later to come face-to-face with the search giant. Toktumi launched a business-based softphone at DEMO 2008 in January. Chief Executive Peter Sisson quickly realized the company had been launched with an unsuitable product when it signed up few users—and those people immediately began to complain. "We got it wrong and launched a [software phone] service that was like Skype, with business calling features built into it," Sisson says. "We had no traction and maybe 100 customers. So we asked them what they wanted." Piggybacking on Google Searches
It turns out users wanted mobility rather than a phone that tied them to a computer. Toktumi listened—and began to provide a Web-based client and hosted telephone system that reaches users on their PC, mobile, or desk phones for $14.95 a month. It's a similar enough service to Google Voice that when the search giant released its telephone product in July, Sisson told his board he expected Toktumi would lose 25% of its customers. Instead, the company's paid subscribers grew 56% in each of the three months following the launch of Google Voice. Sisson managed some of this by using Google's own services to help expand his business. Reasoning that potential Google Voice customers would search for the term on Google, he bought a Toktumi ad that would show up when users searched for Google Voice. The experience actually helped Toktumi, because it educated consumers and businesses about the benefits of a hosted PBX (private branch exchange), he says. It doesn't hurt that Toktumi lets consumers use their own telephone numbers, rather than assigning them one. Coming Up: A VoIP Line
Sisson won't disclose sales or subscriber figures, but the company is still tiny, with 5,000 to 10,000 customers. In coming weeks, Toktumi plans to offer an iPhone app called Line2 that will let users make and receive VoIP calls on the Wi-Fi network. Unlike other VoIP offerings, Toktumi's Line2 service will work over a cellular network for placing and receiving calls when Wi-Fi isn't available. Sisson, a co-founder of VoIP startup Teleo, which Microsoft bought in 2005, recognizes that the future of the phone is its ability find a person wherever he or she is, on the network of the user's choice.If his vision can survive against Google's entry, Sisson might also be an influential player in telecom's future. Also from the GigaOM network: Google Chrome Extensions Spread Out 1999-2000: How Broadband Changed Everything Obama Wishes You (But Not Me) Happy Holidays Five Tips & Tools to Green Your Holiday Travels Is Hiring a Ghostblogger a Bad Thing?