Phonevite Has Several Ideas for Turning a Profit

Free service hopes premium options pay the freight. If not, then come the ads.

By + More

Nifty ideas pop up every day on the Web, including a raft of phone tricks. The problem is getting paid. A cofounder at Phonevite says his company isn't making a profit yet but has plans A and B to get there.

Phonevite lets you send a voice message to 25 people at a time, for free. For now, the company is focused on making money from a premium service, says CEO John Nahm. That's often the first choice for new Web services.

Those premium services are sold to institutions, typically schools or companies that then can send a message to 2,000 phones at once. They pay 5 cents for each successful call. Phonevite sends the calls across the Internet, and the costs of doing that are so low that its early premium accounts are more than paying the costs of running its network, Nahm says.

"If it just weren't for the employee salaries," he says with a chuckle.

So, the answer is scale. Grow the company from today's thousands of users to tomorrow's millions, and premium accounts should rise enough to cover salaries and other costs. For one, it doesn't take many people to run an Internet voice service—Phonevite has four employees, plus an outside consultant, Nahm says.

If scale doesn't do it, there is always advertising.

Nahm says the company would rather not but can tack short ads to the phone messages. To ease the pain, users will have the option to choose pitches that might actually benefit the recipient. Say, an offer for more information on Nike's latest soccer shoe for a call going to a soccer team.

A former banker as well as tech entrepreneur, Nahm says he's confident Phonevite will make it. There are early investors to pay back, and, he notes as added incentive, those employee salaries include his.