EQO – Latest of the Voice/Phone 2.0 facing imminent disaster

Canadian-based EQO communications has cut back its staff from 35 to 12 employees. Is it the latest unfortunate canary in the coal mine?

EQO was/is a VoIP/social networking play offering a free application that provides free IM, cheap calling and cheap texting to your mobile phone. The problem is EQO was like about a dozen other companies on the market with the same business plan triangle of free client/cheap calls/on mobile phones, including Jangl, Jajah and TalkPlus.

EQO may have lasted longer than Jangl and TalkPlus to this point, because it managed to raise $13 million in venture capital to Jangl's $9 million and TalkPlus's $5.5 million. Jajah, on the other hand, figured out it is better to play with the big boys by providing outsourced VoIP services to the likes of Yahoo and others.

For many start-ups - VoIP and others - tightening credit markets translate to swim (make money) or die. Regrettably, many VoIP start-ups lost sight of the prime lesson out of the dot.com/dot.bomb era: Cash flow positive is not a luxury.  EQO won't be the last company yielding to the ax over the next quarter.

For more:
- Techvibes reports [1] on EQO staff cuts
- GigaOm speculates on what might happen to EQO and other VoIP startups [2]

Related articles
Jangl and TalkPlus On the Block - FierceVoIP [3]
Raketu launches browser agnostic VoIP service - FierceVoIP [4]