alarm:clock

ASP - Thursday, June 30, 2005

SoundBite Communications

HQ: Burlington, MA

Founded: 2000

Management: Founder and Chairman is John McDonough who previously was CEO of search company Direct Hit, which Ask Jeeves bought for $500M in February 2000. He was also CEO of Easel which he took public. CEO is Peter Shields who previously ran Tilion and Formation Systems.

Investors: In June 2005, the company raised $8.5M from Commonwealth Capital Ventures, with existing investors North Bridge Venture Partners and Mosaic Venture Partners.

Business Model: Soundbite is an application service provider for in-bound and outbound voice and text messaging for applications such as billings and collections, account activation, contract renewals, welcome calls and fraud alerts. In other words, it creates canned messages for tasks where consumers don't expect a live person to get in touch with them. Soundbite's primary technology is automatic call flow management and answering machine detection. The company claims sales in 2004 of $2.5M and currently has about 40 employees.

Competitors: Adeptra, Centerpost Communications, Par3 Communications.

Dirt: There seem to be a couple of trends working against SoundBite. One is the trend to outsource call centers to lower-priced international reps and the other is the national do-not-call list. It doesn't appear that either of these is ruining SoundBite's business. There are still a number of sectors that are allowed to call your home from collections agencies to political campaigns. Plus SoundBite does not work with human operators rather, like TellMe, it operates a canned voice system. SoundBite has a couple of other venture capital funded direct competitors and they are all making money and growing although none are making a killing.