Virtual Phone System Gives Entrepreneurs a Professional Face

Thursday Jun 16th 2011 by Thor Olavsrud
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With its virtual phone system, Grasshopper aims to help bootstrapping entrepreneurs who make their businesses sound professional, even if they're operating out of a basement.

Grasshopper Group, provider of the highly popular Grasshopper Virtual Phone System, is unusual. To date, the company -- which in 2007 was named to Inc. Magazine's list of 500 fastest growing companies in America -- has helped tens of thousands of companies with their small business communications, but not a single one of Grasshopper's 40 or so employees are in sales.

"We have no sales people," said Jonathan Kay, who holds the title of Ambassador of Buzz for the Needham, Mass.-based Grasshopper. "Approximately 40,000 customers, with more than $10 million in annual revenue, and we have no sales people. That's on purpose. We understand our market. We target entrepreneurs specifically and aggressively because we know and understand people who self-identify as entrepreneurs."

Kay believes that “entrepreneurs do not like to be sold to. They appreciate word of mouth and referrals. We've taken this expert marketing approach. We go to conferences and speak. We do it for free. We throw networking events and speak on panels."

Instead of seeking to sell a product, Grasshopper Group seeks to connect with entrepreneurs on a personal level. An example is the BarCamp Tour, an effort by a group of small businesses -- including Grasshopper Group -- to support BarCamps’ ad hoc "unconferences" for entrepreneurs that have begun springing up across the country since 2005.

By connecting with entrepreneurs, sharing experiences and helping them overcome the stumbling blocks associated with getting new businesses off the ground, Kay explained that Grasshopper Group demonstrates that it understands entrepreneurs and startups. This allows it to form deep relationships with potential customers.

According to Kay, the inspiration for the Grasshopper Virtual Phone System came to co-founders Siamak Taghaddos and David Hauser in 2003 in a Babson College dorm room while they were working on starting up another business. The spark of inspiration came from a vexing problem: How could they present their nascent startup as a professional business worthy of confidence when their phone line ended at a dorm room, and both of them had busy class schedules that took them away from that phone?

Realizing that the problem of presenting a professional appearance in communications was a common one among entrepreneurs bootstrapping early-stage startups, Taghaddos and Hauser scrapped their original idea to focus on helping entrepreneurs with their small business communications.

"Most entrepreneurs aren't starting up a business out of an office," Kay explained. "Office space is expensive and you don't necessarily have a lot of people, so you don't need an office. But you don't want your first interaction with a customer to be unprofessional."

He added, "If you're starting up a company and you're working out of your basement in your boxers, you need a way to mask that."

A Virtual PBX for Small Business Entrepreneurs

Enter the virtual phone system. The idea is simple: You come to Grasshopper with a local or toll free phone number or buy one from Grasshopper. It can connect to a VoIP number, cell phone, landline or a combination of the three. You can have an unlimited number of extensions. If you and a partner both have cell phones connected to the virtual phone system, you can simply dial '#' and your partner's extension to call him or forward a call to him, even if your cell phones use different carriers.

The Grasshopper Virtual Phone System becomes an intermediary layer between your carrier and you. When a call passes through the carrier to the designated phone number, the virtual phone system intercepts it and then acts upon it in a manner you predetermine.

It could then forward the call to your Skype phone, cell phone or landline -- or all three, completing the connection at whichever line you pick up. If you prefer, the call can be routed directly to a professional automated greeting that you can record (or you can use voice talent from Grasshopper's Voice Studio), complete with a company directory of extensions. The virtual phone system remains connected in the background to allow for live transfers.

Your caller ID can show you the number the incoming call dialed (which could tell you whether the incoming call is a sales call or a support call, for instance) and the incoming caller's number as well. You also have the option of sending an incoming call directly to voicemail. Meanwhile, callers see your business phone number in their Caller ID.

You can even get your voicemail and faxes via email if you choose.

Grasshopper offers four different plans with no long-term contracts. However, each plan -- from the entry-level Pay As You Grow plan to the power user MAX plan -- comes with all features included.

"What we really didn't want to do was charge per user, per extension or per voicemail box because, frankly, that doesn't cost us any money," Kay said. "What does cost us money are the actual minutes. Every minute you talk on the phone, we pay the phone company."

Kay said most entrepreneurs with very early-stage startups go with the Pay As You Grow plan. It costs $9.95 a month and 6 cents a minute.

"This is great for early-stage startups that aren't getting a lot of phone calls," Kay said. "We wanted to have a price point that was very reasonable to have that grace period before you ramp up and start jumping full-on into marketing."

The Ramp plan costs $24 a month for 500 minutes and overage fees of 6 cents a minute. The Grow plan costs $49 a month for 2,000 minutes and overage fees of 6 cents a minute. The MAX plan costs $199 a month for 10,000 minutes and overage fees of 6 cents a minute.

Thor Olavsrud is a contributor to SmallBusinessComputing.com and a former senior editor at InternetNews.com. He covers operating systems, standards and security, among other technologies.

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