Fonolo goes for the kill

Fonolo has been on this blog’s radar a few times and recently CEO Shai Berger announced a new website and a televised appearance on “The Pitch” on Canada’s Business News Network (BNN).

The story of Fonolo is an interesting one, starting from its humble birthplace — Canada. Now how many startups do you know from Canada? Nothing against our northern neighbors, but Canada isn’t really famous for being a startup cradle. (Just read what TechCrunch’s Michael Arrington had to say about it…) Personally I am thrilled to see a Canadian company like Fonolo making news and giving its pitch for new funding to expand operations.

It’s a tough economic environment, but what better time to go for the kill.

After stealing the hearts of smartphone users who hate IVR menus, Fonolo will attempt to wow enterprises with its software-as-a-service (Saas) solution. The website redesign clearly focuses on enticing business decision makers. Virtual queuing, pre-call questions, post-call surveys, and zero integration — these are terms that I’ve heard over and over again in my contact center projects. I’ve been in the industry for over ten years, and I am still hearing about these things! So yes, there’s definitely room for disruption and innovation…

The business strategy paid off as Berger talked about a deal with a major Canadian bank. According to Berger in the video, more are in the sales pipeline, and that’s why the company also recently hired a sales executive from IBM.

I see a trend favoring services like Fonolo. Smartphone sales are rising. Text and data usage are skyrocketing. We’re spending less and less time talking on the phone. When you pick up your BlackBerry, iPhone, or Android, you’re more than likely using SMS, checking email, or interacting with an app. Fonolo, in a sense, turns that God forsaken IVR into an app which you can tap, tap, tap on your smartphone or browser.

Consumers easily understand the value Fonolo provides. There will be challenges to sell this to the enterprise, however. Companies usually stick with their telecom vendors or partners when implementing self-service IVRs. In fact, some telecom vendors will heavily discount the IVR (and maybe some basic apps) after selling a PBX solution (VOIP, of course). Companies are wary to bring in another vendor to navigate the often-complex IVR/contact center projects, even if it’s “zero integration.”

What’s glaringly missing on Fonolo’s website is a list of partners. The telecom industry is tough to crack. It’s not just the traditional Big Telecom (Avaya/Nortel, Siemens, Alcatel-Lucent, etc.) anymore. It’s also the software companies (Microsoft, Aspect, etc.), networking companies (Cisco), and even cloud companies (Google). Throw in services companies (IBM, HP, etc.) into the mix, too.

To me Fonolo does represent a disruptive technology. But to be really disruptive in the industry, Fonolo may need to make some big new friends, real fast. Big companies like to meet with big vendors to spend big money. If it’s big customers and short sales cycles that Fonolo’s after, then it only makes sense to buddy up with a partner with much greater resources.


2 thoughts on “Fonolo goes for the kill

  1. Thanks for the write-up Eugene!

    “Virtual queuing, pre-call questions, post-call surveys, and zero integration — these are terms that I’ve heard over and over again in my contact center projects. I’ve been in the industry for over ten years, and I am still hearing about these things!”

    Very good point. The features that Fonolo is bringing to the market have been highly desired by the industry for a long time. It’s easy to understand why — all of them benefit both the caller (less frustration) and the call center (lower cost). Take virtual queuing for example. If you replace waiting on hold with a call back, the caller is freed from holding the phone to his ear, and the company doesn’t have to keep a line open.

    So the big question is, why have these features been so rarely implemented? The answer, we’ve learned, is that today’s call center is very resistant to innovation. Proprietary standards, multi-site operations and outsourcing have made for a very difficult environment for anything new to be deployed. So Fonolo’s answer is to add the smarts “from the outside”. That is, we don’t require anything to be installed at the call center. I believe this approach is what’s needed to break the log-jam.

    – Shai

    CEO, Fonolo


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