Watching the Startups: Voicemail to Text

By Ericka Chickowski  |  Posted 2008-02-05

When the blinking red light on the cell phone or the interrupted dial tone on the fixed line indicates new voicemail, most users would rather deal with it later. Dialing in and wading through messages--searching for the important nuggets--can be a chore, particularly for road warriors.

But the longer you wait, the more dreadful the experience becomes. Messages pile up. Any one of then might hold the key to an important contact or a pending deal.

“Anybody who gets more than five or six voicemails a day understands that voicemail is ridiculous,” says Jason Weissman, principal and founder of Boston Advisors Realty, “I couldn't stand listening for three minutes or more per mail. It is really inefficient for me to check voicemail. I travel a lot and I can’t just sit and be writing down messages all day.”

As indispensable as it is, voicemail is becoming a technological relic in an increasingly text- and search-friendly business environment. If a new rash of start-ups has their way with the wizened technology, however, voicemail will join the textual revolution. These companies are pushing out new voicemail-to-text products that automatically transcribe voicemail and transfer it to the user’s e-mail or SMS repository.

“Voicemail today is a bit of an antique, it hasn't changed in 15 years,” said Dr. Anthony Bladon, chief scientist at the voicemail-to-text vendor CallWave. “You have to call into a number and listen through maybe five messages when all you want to hear is number five.”

SimulScribe and CallWave of Santa Barbara, Calif. are one of three front runners banking on speech to text technology to revolutionize voicemail, joined in the fray by U.K.-based SpinVox. All three vendors hope to address voicemail’s growing irrelevancy in the wake of e-mail, IM and SMS and they believe the market holds great potential to capture mainstream users.

“There used to be so many instances in my business life when I would get a voicemail from someone at ten o’ clock in the morning asking for a quote on a fairly big deal, but that they needed to have a response quickly and I would listen to that voicemail at ten o’ clock at night because I was running around. I was in meetings and never had a chance to listen to voicemail,” said James Siminoff, founder of New York-based SimulScribe, who started the company with the expectation that he wasn’t alone in his frustrations.

Weissman first started using SimulScribe a year and a half ago and six months later encouraged all thirty of his brokers and agents to use the technology as well. He is thrilled with how much time the technology has shaved from his workday so that he can focus on revenue-producing activities.

“I get a lot of voicemail, some days some days I'll get fifty or more, so this creates efficiency and saves a lot of time,” said Weissman. “Its one of the paradigm shifts in how I view technology in my daily routine. It affects me daily. Really, for voicemail intense industries this is essential.”

Is voicemail-to-text technology ready for prime time absorption by business and consumer users?

Estimates are difficult to come by, because as competition heats up, each player is holding its rate of penetration close to the vest. SimulScribe stopped announcing its numbers after reaching 10,000 subscribers and $1 million in revenue. It is safe to assume a base of more than 2.5 million, considering the fact that SimulScribe SimulSays powers Vonage’s free Vonage Text offering.

CallWave is just coming out of beta with its Vtext voicemail-to-text technology, but it won't say how many people have tested the product or are choosing to now pay for it. It has said that so far it has processed over two billion voicemails.

SpinVox is the most open about its numbers, claiming a subscriber base of 4 million.

If this is any indication of the growth that the market can expect in the near future, it is clear that the potential is there, but it still has a long way to go before voicemail-to-text hits the mainstream. Even with a combined subscriber base in the low millions, that is just a tiny fraction of the overall potential market—the U.S. mobile market alone contains more than 90 billion voicemail inboxes according to CallWave figures.

 “It is still too early for this to have permeated into the mainstream, but that is where the endgame is,” said William Ho, analyst with Current Analysis. “I think there is potential for this stuff, because I think that in today’s environment where people are busy all of the time, on the move and forwarding their office phones to their cell phones, to have this feature on there could potentially be valuable.”

One of the players in this emerging market has an interesting take on the technology, claiming it to be a key part of unified communications, one that includes VOIP, instant messaging, PBX systems, and, of course, mobile devices.

“Voicemail-to-text is the missing piece of the unified communications puzzle,” said Richard Stern, senior vice president of global product marketing for SpinVox. “Users gain the benefit of text-based technology, including searchability and the ability to deal with messages on their own time. If I’m in a meeting I can now check my voicemail slyly under the table and tap in quick reply.”

Stern believes that as word gets out and demand mushrooms, voicemail-to-text has the potential to become ubiquitous in as few as 12 to 24 months. Right now, however, the market is still in its infancy and analysts haven’t even gotten around to sizing it.

Ho with Current Analysis says that from what he has seen thus far, the speech recognition technology driving these services is good enough for the standard business person. All three of the major vendors claim a 95 percent accuracy rate or better. The real debate is whether users will be willing to pay extra for voicemail after years of having the service baked into the typical phone bill, Ho says.

“The question is how to wean them off the free stuff,” Ho said. “There are certainly going to be a lot of people who say, well I like it but I don't like it enough to pay for 10 dollars a month.”

Ho believes that there is still a great deal of uncertainty in the market when it comes to service delivery and subscription models. This is one of the key differentiators between SimulScribe, CallWave and SpinVox, which each has its own approach to spreading voicemail-to-text within the marketplace.

SimulScribe has chosen to go primarily direct to consumer, with occasional deals such as the one that it brokered with Vonage in April 2007. Its product is a pure voicemail-to-text offering with multiple tiers based on the number of voicemails processed each month.

“Our customer is typically that business user who is part of a corporation but has enough disposable income to pay out of pocket to have better communication products,” Siminoff said.

SpinVox offers a similar pricing structure but has chosen to focus its efforts on negotiating carrier deals and partnering with enterprise unified communications vendors to integrate directly into their product lines. Though it hasn’t announced any major deals in the latter category, last year SpinVox won accounts with Rogers Communications and Altel Wireless.

Finally, CallWave is also attacking the direct-to-consumer angle, but it hopes to attract users based on its overall communications package. Vtext is only one part of the technological puzzle in its new Virtual Voicemail Suite, which also includes real-time mobile call screening, as well as a personalized "content locker" for mobile applications.

Though there is really no clarity on which model will prevail, Ho believes that the market will likely cause all players to adjust eventually. “Like with any start-up you go with one idea, you tell the idea to your VCs and then the reality of the marketplace makes you adapt,” said Ho.

Tony Rizzo of The 451 Group predicts that the model most likely to survive will probably be one similar to SpinVox’s current track.

“On the consumer side the carriers themselves will deliver these services over time, and render third party vendors unnecessary--as it should be; this needs to be a core network offering,” said Rizzo, who is research director for the firm’s mobility group. “In the enterprise, as VoIP services become prevalent, and as the old tethered business phone gives way to mobile phones through VoIP, we'll see these sort of services become an inherent part of core business communications offerings.”

Before this happens though, Rizzo believes that the current crop of technologies still need to address several concerns. Top on the list is performance.

“They all require more or less hijacking your carrier inbox--'redirecting' is the more polite way of putting it--which ultimately leads to sluggish performance,” said Rizzo.

Stern of SpinVox agrees that such redirecting can definitely cause performance issues, which is why his company has chosen to work closely with the carriers rather than going it alone.

“That is why we are working with equipment vendors and carriers,” said Stern. “When you go direct to consumer it can muck up the plumbing a bit.”

Rizzo also believes that current technologies need to up the ante in the flexibility department.

“Simply converting voicemail to text - going to either a PC-based inbox or to a mobile device is not very useful... I want to simply be able to (either) choose, as an option, if I'm already listening to voicemail, to push a voicemail out to text as an option for that voicemail,” Rizzo said.

Rizzo continued: "Even better, I want to take the visual voicemail capability that AT&T and iPhone delivers, and be able to convert any listed voicemail into an email, either immediately or after going through the process of listening to one.” said Rizzo. “As part of these I want to also be able to pre-set what voicemails might automatically be either forwarded or converted to text email, for example, always send a voicemail from my CEO to my email inbox or convert to text and send as an SMS message to my phone.”

If the start-ups in this market can respond with this kind of flexibility, Rizzo agrees with Stern’s estimates that voicemail-to-text has the potential to become prevalent within two years.

“There is absolutely a huge demand for such flexible services - especially in the enterprise,” said Rizzo. “I expect to see this become a far more robust and essentially ubiquitous offering as we head into 2009.”